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by Justin Velez-Hagan, National Executive Director
A recent article published here, discusses how an amendment to the recent tax extension bill could increase business investment and perhaps even hiring.
The crux of the tax provision allows businesses to fully write off capital expenditures that would normally depreciate over time. As an example, if a company wants to buy a new piece of equipment, say a delivery truck, they would usually be able to deduct from their tax base (increase their cost) by the amount that the truck has lost value during that year (set at a GAAP accounting standard), which in effect reduces their tax bill at the end of the year by a portion of the investment, instead of all at once. However, under the new amendment, companies can write off the entire amount immediately.
The administration believes that this extra tax deduction will allow a greater investment in human capital (increase in hiring) as well as to encourage companies to invest in expansion that they would otherwise have put off. Read the rest of this entry »
As posted at SBECouncil.org:
Most members of Congress exclaim to support small business owners and entrepreneurs through their work on Capitol Hill. However, when it comes to how U.S. Senators and Representatives actually vote on legislation that impacts the profitability and survivability of small firms, their actions sometimes don’t match up to all the talk.
SBE Council released its Small Business Scorecard for the 111th Congress this week to get beyond the “talk” and posturing. The scorecard can be found on the SBE Council website. A handy scorecard “quick finder” is also available – a map of the U.S. that allows you to click on your state to see how your U.S. House and Senate Members cumulatively scored on small business KEY VOTES. Read the rest of this entry »
Why the small business jobs bill won’t create that many jobs.
By Jill Priluck, posted at Slate
It’s rare for small business to drive headlines, but the Small Business Jobs Act, passed by Congress last week, has brought the sometimes yawn-inducing and often misunderstood sector to the front pages.
Heavy on lending and tax provisions, the legislation has been touted as a means to spur job growth. But the bill is actually a Cash for Clunkers-like Band-Aid for the intertwined scourges of chronic joblessness and stymied growth. While the aid package will help many small businesses, it won’t create many jobs because it will benefit more established firms, rather than the young ones that do the bulk of hiring. Read the rest of this entry »
By Justin Velez-Hagan
National Executive Director
Washington, D.C., September 28, 2010. Yesterday, the president signed into law the Small Business Jobs and Credit Act. The bill has been touted as one of the best ideas for reinvigorating small business and job growth and, hence, deserves an analysis by The National Puerto Rican Chamber of Commerce, a staunch supporter of small business and entrepreneurship.
The legislation itself provides temporary tax incentives as well as a general account intended to provide local community banks with funding for small business lending. Although its intent is clear, language within the bill does not guarantee funding for small business lending. While 13 democrats voted against it, only 3 republicans supported the bill. One of those democrats, the Chairwoman of the House Small Business Committee and the first Puerto Rican woman elected to U.S. Congress, Nydia Velasquez (NY), voted against the bill amidst concerns that capital from the bill would not go to its intended source.
After examining the bill, it becomes clear that the tax incentives are temporary and greater strain will be placed upon small businesses, limiting their ability to stimulate the economy. Dr. Jeffrey R. Cornwall, the Director of the Center for Entrepreneurship at Belmont University, states that small business owners “don’t need more debt, they need more customers—and the government can’t provide those.”[i]
What Makes the Entrepreneur Tick? Read the rest of this entry »
Harvard University professors Edward Glaeser and William Kerr recently published an article detailing their long-standing research that contradicts the generally accepted notion that regional economic growth is highly correlated to the number of large employers.
The professors call the systematic approach of local governments offering economic incentives (usually in the form of tax breaks) to large, developed corporations “smokestack chasing.” However, in contrast to generally accepted political theory, their research proves that incentives for the creation or growth of a greater number of smaller or start-up firms is more attributable to regional economic growth. Read the rest of this entry »